No economic reports scheduled for this morning
but the remainder of the week will be busy. The Fed FOMC will release
their economic forecast along with their policy statement on Wednesday.
One area of near-unanimous agreement is that the Fed will not raise
rates this week. Instead, we will look at the FOMC’s economic forecast
and the language they use in their statement. Also on the calendar:
February retail sales, Housing Starts, Industrial Production, Job
Openings, Philly Fed, Consumer Sentiment Index, and the Commerce
Department’s current account for the fourth quarter. The reports could
shed more light on the health of the U.S. economy and the future path of
monetary policy.

Morgan Stanley
strategists are growing increasingly concerned about the risk of a
global recession, slashing forecasts for all major equity markets and
advising investors to sell stocks that have recently rallied. They also
cut bond yield forecasts for 2016, saying the U.S. central bank will
wait until December before raising interest rates. According to the
company report, Treasury 10-year yields might fall to 1.45% by the end
of September, analysts wrote, approaching the record low of 1.38% set in
2012. They also warned that a slowing global economy and high
production would prevent any sharp rises in oil prices. For 2016, Morgan
Stanley now sees the US economy growing by 1.7%, down from a previous
forecast of 1.9%. The Eurozone is expected to grow by 1.5%, down from
1.8%, while the outlook for emerging-market economies was cut to 4% from
4.4%.

If you don’t like that analysis, Goldman Sachs
issued a report saying they think the Fed will hike rates in June, and
an April rate increase is still on the table, even if it rattles
financial markets. Goldman analysts say it is more important for
policymakers to assure a smooth landing for the economy rather than a
steady stock market.

The Bank of Japan’s policy board is
set to discuss this week whether to exempt $90 billion in short-term
funds from its newly imposed negative interest rate, after the
securities industry warned that investment money would be driven into
bank deposits. China’s central bank won’t resort to
excessive stimulus to bolster growth but will keep a flexible stance in
the event of an economic shock – domestic or global. The PBOC cut
interest rates six times since November 2014 and reduced the amount of
cash that commercial lenders must hold as reserves. Both the Swiss
National Bank and Bank of England opine on Thursday

Next weekend’s oil talks may
be in jeopardy after Iran’s Oil Minister said his country won’t join a
group production freeze until it doubles its post-sanctions output. Iran
said they would only join the output freeze group once they reached
production of 4 million barrels a day. In a sign that investors are
growing more skeptical about a rebound in oil prices, ICE data showed on
Monday that speculators had cut net long positions in Brent crude by
9,500 contracts in the week to March 8.

For now, share buybacks
continue to prop up the stock market. Mutual fund and exchange traded
fund investors have been selling – pulling out $40 billion since January
and on pace for $60 billion, one of the biggest quarterly withdrawals
ever. On the flip side, S&P 500 Index companies are poised to
repurchase as much as $165 billion of stock this quarter, approaching a
record reached in 2007. Of course, buybacks can get dangerous,
especially when companies take on debt to buy their shares. And you have
to wonder how far this extreme can go.

More than three million people marched
through cities across Brazil on Sunday to protest political corruption,
a weak economy, and to call for the impeachment of President Dilma
Rousseff, in a showing that could accelerate efforts to remove her from
office. The demonstration in Sao Paulo was the largest ever recorded by
polling firm Datafolha. Brazilians demonstrated peacefully for
Rousseff’s ouster, expressing their support for the anti-corruption
blitz that has put several high-profile executives and politicians
behind bars.

In late 2010,
in the waning months of the Financial Crisis Inquiry Commission, the
panel responsible for determining who and what caused the financial
meltdown that lead to the worst recession in decades voted to refer
Robert Rubin to the Department of Justice for investigation. The panel
stated it believed Rubin, a former U.S. Treasury Secretary who has held
top roles at Goldman Sachs and later Citigroup, “may have violated the
laws of the United States in relation to the financial crisis.” Rubin,
the commission alleged, along with some other members of Citi’s top
management, may have been “culpable” for misleading Citi’s investors and
the market by hiding the extent of the bank’s subprime exposure,
stating at one point that it was 76% lower than what it actually was.

No government action was ever brought against Rubin. And there is no
evidence that Department of Justice acted on the crisis commission’s
recommendations. A source close to Rubin says the former Wall Street
executive was never contacted by the Justice Department in relation to
the commission’s allegations. And it wasn’t just Rubin and a few
executives at Citi, the FCIC referred several cases to the Department of
Justice and, as we all know, nothing happened. The bankers were never
jailed, never indicted. A few fines were paid, but that mainly came from
shareholders. No major Wall Street figure was ever prosecuted for
crimes related to the financial crisis.

On Friday, the National Archives released the previously unreleased
documents from the Financial Crisis Inquiry Commission, including
minutes of meetings and transcripts of interviews. The FCIC
investigations included some pretty clear evidence for fraud and other
criminal acts; the cases were referred to the Department of Justice;
nothing was done. Why didn’t the DOJ act? They won’t say. None of this
is surprising but it is a well-documented and devastating indictment of
how the banksters have corrupted the justice system. And sadly, that is
the only kind of indictment we will ever see.

Plaintiffs suing General Motors over
a faulty ignition switch will get two chances in a Manhattan court this
week to argue that the U.S. automaker should be held accountable for
injuries, deaths and lost vehicle value. Jury selection begins later
today in the second trial involving a car accident allegedly caused
by GM’s defective device (a first trial ended in January following
claims of misleading testimony). In the same courthouse tomorrow,
plaintiffs suing over lost vehicle value and accidents that occurred
before GM’s 2009 bankruptcy will seek to reverse last year’s court
decisions that freed “New GM” from several liabilities.

Starwood Hotels & Resorts Worldwide
received a buyout offer from a consortium led by China’s Anbang
Insurance Group, possibly derailing the company’s planned takeover by
rival Marriott International. The offer of $76 per share in cash values
Starwood at $12.8 billion. Marriott said it remained committed to its
offer for Starwood, which would create the world’s largest hotel chain
with top brands including Sheraton, Ritz Carlton and the Autograph
Collection. Marriott’s offer of $72.08 per share in stock and cash
valued Starwood at $12.18 billion on Nov. 16. That offer is now worth
about $11 billion as Marriott shares have dropped 6.5 percent since.

Private equity firm Apollo
Global Management is nearing a deal to acquire The Fresh Market, Inc.
for $28.50 per share in cash, or more than $1.3 billion, in a move that
could derail bids from Kroger, KKR, and TPG Capital. An agreement could
be announced as early as today, but a deal has not yet been finalized
and was still possible to be amended or fall apart at the last minute.

AlphaGo, Google’s Go-playing computer,
took a 3-0 lead on Saturday against one of the world’s top players,
clinching the five game series. “I am very sorry for the powerless
display,” Lee Sedol told reporters in Seoul. “I have never felt before
such severe pressure as I do now, and I suppose my abilities were a bit
lacking to overcome that.” Lee struck back to win game four against
AlphaGo on Sunday. The fifth match will take place tomorrow.

The annual Game Developers Conference kicks
off today in San Francisco, where more than 26K people from around the
globe will congregate for a five-day gathering focused on augmented- and
virtual-reality. According to Digi-Capital, investors in 2016 have
already have pumped $1.1 billion into the technologies, more than the
total for any prior year. Researchers at Gartner estimate nearly 40
million headsets will be sold world-wide by 2020.

Just in case
you’re thinking that digital games are nothing more than games,
Microsoft announced today that computer scientists and amateurs will be
able to evaluate and develop artificial intelligence, or AI, software
using its Minecraft virtual landscapes. Improving AI software by getting
it to play video games has been done before. But Microsoft suggests the
open-ended nature of Minecraft makes it particularly useful because of
the huge variety of situations it can simulate from first-person
perspectives.

Today is Pi Day, March 14, or 3-14, the first three digits in Pi;
which refers to the ratio of a circle’s circumference to its diameter,
and not a delicious desert. The diameter of a circle is the distance
from edge to edge, measuring straight through the center. The
circumference of a circle is the distance around. And the ratio works on
any circle, big or small, which means Pi is a constant number. As an
irrational and transcendental number, it will continue infinitely
without repetition or pattern, except of course, that it embodies the
order inherent in a perfect circle. The first 6 digits in Pi are
3.14159, and if you round that number up, you get 3.1416, which would
match March 14, 2016.

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